Apple fails yet again: $133.5B vanishes

December 1501:412015

Apple (AAPL) shares are falling hard yet again Monday – dipping below $110 for the first time since October – marking the latest failure for the stock and a new push toward its lows. Shares of Apple Monday are down $2.58, or 2.3%, to $110.60 as concerns mount over slipping smartphones sales as the market matures. Shares of the gadget maker have been disappointing despite investors’ high hopes its gadgets would be hot sellers during the holidays.

The latest concern to hit Apple shares came Monday after Morgan Stanley cut its outlook for Apple smartphone sales. Morgan Stanley now sees smartphone shipments to fall 6% in the current fiscal year. A majority of Apple’s revenue comes from smartphones so any slowdown in sales would be a problem.

The number of failures for the stock are piling up, including:

* Failure to retake its high – even amid a massive tech-stock rally. Apple bulls have been talking about the company being worth $1 trillion for years. But lately – the company has been destroying more wealth than creating it. More than $133 billion in market value has been erased since shares hit their high at $134.54 on April 28, 2015. Apple is worth $631 billion.

* Failure to join the tech-stock rally. The fact Apple’s shares are struggling is even more noticeable since there’s a monster rally raging this year in shares of most giant tech companies (see chart below). Shares of Apple – up just 0.2% this year – have been noticeably absent from a powerful rally in other big technology shares. Shares of Netflix (NFLX) and Amazon (AMZN) have more than doubled this year. Google parent Alphabet (GOOGL) is up 41% and Microsoft (MSFT) 17% this year.

* Failure to diversify. New products such as the Apple Watch – now in its first holiday season – and Apple Pay have failed to rekindle the excitement for the stock. Apple’s smartphone business is still the source of 66% of Apple’s revenue, says Trefis, which is higher than what it was in 2011 (48%). Investors will have to wait a few weeks to see how the December quarter looks. But Trefis estimates the smartphone will still be 66% of Apple’s revenue in 2017.

* Failure to pull out of the correction. Shares of Apple are down nearly 18% from their recent high – putting them squarely in correction territory, broadly defined as a 10% drop from a recent high. The broad Standard & Poor’s 500 isn’t going great this year – but is only down 5% from its high meaning it is evading a correction. Investors have an even larger worry – the shares drop to $107.63 – the stock would be back into a 20% bear market. That’s only $4.37 a share away.